On November 16, 1999, the Securities and Exchange Commission (SEC) filed a
civil complaint in the United States District Court for the Middle District of
Tennessee against six Nashville-area residents alleging insider trading in the
securities of Mid Ocean Ltd. (Mid Ocean) prior to the March 16, 1998
announcement that Mid Ocean would merge with Exel Ltd. (Exel), a Bermuda-based
reinsurance company.

The SEC's complaint alleges that prior to the March 16, 1998 announcement,
Jay T. Deragon, an Exel consultant who owns an insurance consulting business in
Hendersonville, Tennessee, became aware of the proposed merger between Mid Ocean
and Exel. The complaint further alleges that Deragon, in violation of his
fiduciary or similar duty of trust and confidence to Exel, tipped Robert G.
Poole of Hendersonville, Tennessee, about the proposed acquisition of Mid Ocean.
According to the complaint, shortly after Deragon's illegal tip, Poole told Mark
C. Chesnut of Goodlettsville, Tennessee, the information about Mid Ocean. On or
before March 13, 1998, Poole provided Chesnut with $20,000 to invest in Mid
Ocean call options that would appreciate in value when the proposed acquisition
of Mid Ocean was announced to the public. Using Poole's $20,000, Chesnut
purchased out-of-the-money Mid Ocean call options on March 13, 1998 valued at
$65 per share. Those options would have expired worthless in just six days if
Mid Ocean's stock price (which was $62 per share at the time of Chesnut's
purchase) did not rise above $65. Immediately after the March 16, 1998
announcement, Mid Ocean's stock price rose as high as $74 per share, and Chesnut
sold the options and, the SEC alleges, divided the profit with Poole.

The complaint also alleges that prior to the March 16, 1998 announcement,
Poole tipped his father-in-law, Giles R. Krebs of Hendersonville, Tennessee,
about the proposed merger. According to the SEC's complaint, on March 13, 1998,
Krebs purchased Mid Ocean stock which he sold for a profit immediately after the
March 16, 1998 announcement.

The SEC's complaint further alleges that prior to the March 16, 1998
announcement, Poole provided the inside information about the Mid Ocean merger
to Cristan K. Blackman of Hendersonville, Tennessee. According to the SEC's
complaint, Blackman, who is a stockbroker in the Nashville office of Morgan
Keegan & Co. (Morgan Keegan), tipped Charles R. Roberts of Hendersonville,
Tennessee, another Morgan Keegan stockbroker, about the Mid Ocean merger. The
SEC's complaint alleges that on March 13, 1998, in order to profit from the
material non-public information which they had received, Blackman purchased Mid
Ocean call options and 3,000 shares of Mid Ocean common stock, and Roberts
purchased 1,000 shares of Mid Ocean common stock. In addition, the complaint
alleges that Blackman tipped his brother and three of his clients, and Roberts
tipped an additional twelve of his clients, about the Mid Ocean merger.
According to the complaint, Roberts attempted to disguise his connection to his
Morgan Keegan clients' trading by telling some or all of them to purchase Mid
Ocean stock at other brokerage firms. The three clients that Blackman tipped,
Blackman's brother, and twelve of Roberts' clients all purchased Mid Ocean stock
or options on or before March 13, 1998, and sold their stock or options for a
profit on or after March 16, 1998.

According to the SEC's complaint, all of the aforementioned trading resulted
in allegedly illegal profits of approximately $405,000. The Commission's
complaint seeks injunctions against Blackman, Chesnut, Deragon, Krebs, Poole and
Roberts for violating Section 10(b) of the Securities Exchange Act of 1934
("Exchange Act") and Rule 10b-5 thereunder, disgorgement of all
illegal profits earned, plus prejudgment interest, and civil penalties.

The SEC also announced that simultaneously with the filing of its action, and
without admitting or denying the allegations of the complaint, Deragon, Poole,
Chesnut and Krebs consented to the entry of Final Judgments permanently
enjoining them from violating Section 10(b) of the Exchange Act, and Rule 10b-5
thereunder. In addition, Deragon consented to pay a civil penalty of $84,678.26,
representing the profit earned by Poole and Chesnut's trading in Mid Ocean
options. Poole consented to pay disgorgement of $41,000, representing the profit
he received from Chesnut's options purchase, plus prejudgment interest, and a
civil penalty of $41,000. Chesnut consented to pay disgorgement of $43,678.26,
representing the profit he kept from his purchase of Mid Ocean call options,
plus prejudgment interest, and a civil penalty of $43,678.26. Krebs consented to
pay disgorgement of $3,625, representing his profit from the purchase of Mid
Ocean stock, plus prejudgment interest, and a civil penalty of $3,625. The case
against Blackman and Roberts is proceeding.

The SEC acknowledges the assistance of the American Stock Exchange in
investigating this matter.